scholarly journals The more I err, the less I pay

2019 ◽  
Vol 53 (5) ◽  
pp. 916-943 ◽  
Author(s):  
Etayankara Muralidharan ◽  
Hari Bapuji ◽  
Manpreet Hora
Keyword(s):  
Future Research ◽  
Published Data ◽  
Product Recalls ◽  
Firm Characteristics ◽  
Product Recall ◽  
Product Complexity ◽  
Firm Reputation ◽  
Content Type ◽  
The Us ◽  
Toy Industry

Purpose This study aims to investigate the effects of firm characteristics and crisis characteristics on remedies offered to consumers by firms in the event of a product recall crisis. Design/methodology/approach Published data on 868 product recalls in the US toy industry from 1988 to 2011 have been used to investigate the effects of firm experience in product recalls, type of firm (company versus intermediary) and product recall severity in predicting remedies offered to consumers in the event of a product recall. Findings The findings show that firm recall experience, firm type and recall severity are negatively associated with recall remedies offered. Specifically, firms offer lower remedies if they have higher recall experience, if they are upstream firms in the supply chain (farther from consumers) and if the recall is more severe. Research limitations/implications This study focuses on the toy industry and does not consider product complexity, firm reputation and the role of external regulatory agencies in the prediction of remedies offered by firms. Future research may extend this study to include the above factors. Practical implications Offering a high remedy to consumers of a recalled product may be a responsible decision by a firm, but it may also attract shareholder wrath. The study has implications for managing multiple goals in product recall crisis management. Originality/value Studies focused on issues of interest to consumers during a recall crisis, such as swift recalls and appropriate remedies, are limited. This study contributes to the understanding of the antecedents of recall remedies.

The effects of brand equity and failure severity on remedy choice after a product recall

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sascha Raithel ◽  
Alexander Mafael ◽  
Stefan J. Hock
Keyword(s):  
Decision Making ◽  
Brand Equity ◽  
Probit Model ◽  
Future Research ◽  
Product Recalls ◽  
Product Recall ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Content Type ◽  
Failure Severity

Purpose There is limited insight concerning a firm’s remedy choice after a product recall. This study aims to propose that failure severity and brand equity are key antecedents of remedy choice and provides empirical evidence for a non-linear relationship between pre-recall brand equity and the firm’s remedy offer that is moderated by severity. Design/methodology/approach This study uses field data for 159 product recalls from 60 brands between January 2008 to February 2020 to estimate a probit model of the effects of failure severity, pre-recall brand equity and remedy choice. Findings Firms with higher and lower pre-recall brand equity are less likely to offer full (vs partial) remedy compared to medium level pre-recall brand equity firms. Failure severity moderates this relationship positively, i.e. firms with low and high brand equity are more sensitive to failure severity and then select full instead of partial remedy. Research limitations/implications This research reconciles contradictory arguments and research results about failure severity as an antecedent of remedy choice by introducing brand equity as another key variable. Future research could examine the psychological process of managerial decision-making through experiments. Practical implications This study increases the awareness of the importance of remedy choice during product-harm crises and can help firms and regulators to better understand managerial decision-making mechanisms (and fallacies) during a product-harm crisis. Originality/value This study theoretically and empirically advances the limited literature on managerial decision-making in response to product recalls.

Product recalls and product-harm crises

2014 ◽  
Vol 24 (3) ◽  
pp. 190-210 ◽  
Author(s):  
Syed Tariq Anwar
Keyword(s):  
Small Scale ◽  
Product Recalls ◽  
Consumer Product Safety Commission ◽  
Content Type ◽  
Societal Issues ◽  
The Us ◽  
The Usa ◽  
Managerial Implications ◽  
Toy Industry ◽  
Compare And Contrast

Purpose – The aim of this study is to investigate and analyze product recalls and product-harm crises in the US toy industry, which is a major area in marketing and firms' competitiveness. Design/methodology/approach – By using longitudinal data from the US Consumer Product Safety Commission (CPSC), the paper uses content analysis to compare and contrast toy recalls, product hazards and country of origin issues of 721 toy recalls in the US market between 1974 and 2008, covering 270 million recalled toys. Findings – Findings of this work reveal that most of the recalled toys were manufactured in China, although a wide variety of toy brands were designed in the USA. Major hazards of toy recalls included choking, lead poisoning, aspiration, fire/burn and other injuries. Research limitations/implications – The study relied on the CPSC's data that seemed representative of the toy industry in the US market, but missed other markets of Europe and Asia. Also, there was availability of detailed data in sub-categories of the toy industry. Practical implications – The paper provides useful academic and managerial implications that can help us understand the issues of product recalls and product-harm crises. Social implications – Toys are one of the most widely available products in the world; the industry is a $50 billion industry and has transformed itself from a small-scale business sector into a well-established industry. Originality/value – This investigation is particularly important in the areas of firm-specific competitiveness, business ethics and regulatory and societal issues.

Firm/product reputation and new-product recalls

2018 ◽  
Vol 36 (5) ◽  
pp. 572-584
Author(s):  
Kashef Majid ◽  
Mooweon Rhee
Keyword(s):  
Negative Impact ◽  
New Products ◽  
Hierarchical Linear Model ◽  
New Product ◽  
Market Response ◽  
Product Recalls ◽  
Product Recall ◽  
Firm Reputation ◽  
Content Type ◽  
Simultaneous Impact

Purpose The purpose of this paper is to identify the rate of recall for new products vs established products and to explore the simultaneous impact of a firm’s reputation and a product’s reputation on the market response to a product recall. Design/methodology/approach The authors first use an accelerated hazard model to establish that new products are more vulnerable to damage than established products. Once this is established, the authors use a hierarchical linear model to explore the simultaneous impact of the firm and product reputation on the market response to a product recall. Findings The findings indicate that new products have a greater probability of recall over time than existing products and after a product recall a positive firm reputation can negatively impact the firm and hence becomes a liability. However, when the product is first introduced, the product reputation can help offset any negative market response; the product reputation can therefore be an asset. Research limitations/implications New products are more flawed than their established counterparts. A positive reputation can be a liability but a positive product reputation can offset the negative impact of the firm reputation and this is especially pertinent to new products. Originality/value The majority of prior research has focused on the reputation and assumed that the firm represented the product as well; the findings of this study reveal that the reputation of the product can have contrasting effects to the reputation of the firm.

Corporate payout-form: investors’ preference and catering theory

2018 ◽  
Vol 44 (12) ◽  
pp. 1418-1433
Author(s):  
Abdelaziz Chazi ◽  
Alexandra Theodossiou ◽  
Zaher Zantout
Keyword(s):  
Design Methodology ◽  
Policy Formulation ◽  
Future Research ◽  
Stock Repurchases ◽  
Firm Characteristics ◽  
Content Type ◽  
Robust Measures ◽  
Practical Implications ◽  
Form Preference ◽  
Number Of Firms

Purpose The purpose of this paper is to develop and validate new robust measures of investors’ preference for the form of regular corporate payout. Then, the paper adds to the empirical evidence on catering theory by examining managers’ catering to such preference. Design/methodology/approach The authors use the matching method to control for firm characteristics. The authors apply two robustness tests to validate the measures. The authors use the rigorous multivariate analysis. Findings US investors’ preference for regular dividends vs regular stock repurchases, being different forms of corporate payout, varies over time. Managers cater to investors’ preference for payout form. The findings are consistent with the catering theory of Baker and Wurgler (2004a). The number of firms that pay cash dividends regularly continue to outnumber the ones that purchase their shares regularly. Research limitations/implications The study only uses US data. It does not cover other countries. Practical implications The measures can be used in several future research endeavors, such as examining investors’ payout-form preferences in other countries (see Booth and Zhou, 2017) and exploring their determinants, the corporate governance characteristics of firms that cater to investors’ preference vs firms that do not, etc. Social implications The study contributes to understanding investors’ preferences and corporate payout behavior which is prerequisite to efficient policy formulation. Originality/value The proxies for investors’ payout-form preference control for firm characteristics and are unrelated to investors’ time-varying risk preferences. Also, they are robust to measurement issues. Moreover, the study covers a period of 40 years.

Off-price versus price-off

2014 ◽  
Vol 42 (10) ◽  
pp. 902-928 ◽  
Author(s):  
Ronald L. Hess Jr ◽  
Lawrence Ring
Keyword(s):  
Marketing Research ◽  
Extreme Points ◽  
Department Store ◽  
Future Research ◽  
Department Stores ◽  
Content Type ◽  
Store Attributes ◽  
The Us ◽  
Retail Format ◽  
Retail Formats

Purpose – The purpose of this paper is to better understand the unique competitive positioning characteristics of off-price retailers and how they compare to other types of retailers. The authors compare off-price and upscale off-price retailers with four major formats of retailers: first, discount department store/warehouse club retailers; second, moderate department store retailers; third, department store retailers; and finally, specialty department store retailers. Design/methodology/approach – The paper employs a representative sample that was randomly drawn from four primary metropolitan cities in the USA. The data were collected using telephone interviews by a prominent, marketing research firm. A series of discriminant analyses were conducted to examine the data. Findings – The findings of the paper indicate that the off-price formats were consistently positioned at extreme points along the price/value continuum, signifying the strongest value-orientation among the other retail formats. The authors also found that while the upscale off-price format followed the specialty department stores in terms of fashion. The results point to an important disadvantage of the off-price format – although strong on price/value, they often fall short on fashion and many other store attributes that may be important to luxury-oriented customers. Research limitations/implications – The paper employed a sample from several cities collected using a telephone interview methodology within the US. Due to these limitations, the findings of this paper may be hampered by this methodology and not generalize to regions outside of the US. Future research should examine how the demise of most of the upscale off-price retailers and growth of flash web sites have changed the competitive structure of retailing. Practical implications – The results demonstrate that the positioning of the off-price retail format is unique from other formats. The retail formats occupy distinct positions. The off-price retail format is strongly associated with the price/value position but only moderately fashionable to customers, especially when compared with the department and specialty department store formats. In contrast, the upscale off-price format, while also strongly positioned along the price/value continuum, is considered much more fashionable than the off-price retail format. In fact, the upscale off-price retail format only trails the specialty department store format in terms of fashion. Originality/value – The unique characteristics of the off-price retail format and growing interest from upscale department stores underscores the need for a comprehensive understanding of the motives of the off-price shopper. This paper provides retailers with a more complete understanding of the store attributes that differentiate the off-price retail format from other major retail store formats. The overall objective of this study is to offer a comprehensive view of the positioning of off-price retailers compared with many alternative retail formats.

The effect of product complexity and communication quality on IOCM and OBA in buyer– supplier relationships

2019 ◽  
Vol 16 (1) ◽  
pp. 1-29 ◽  
Author(s):  
Bakil DhaifAllah ◽  
Sofiah Md-Auzair ◽  
Ruhanita Maelah ◽  
Md Daud Ismail
Keyword(s):  
Structural Equation ◽  
Discriminant Validity ◽  
Cost Management ◽  
Reliability And Validity ◽  
Equation Modeling ◽  
Future Research ◽  
Communication Quality ◽  
Product Complexity ◽  
Supplier Relationships ◽  
Content Type

Purpose This paper aims to investigate the effect of product complexity and communication quality on inter-organizational cost management (IOCM) and open book accounting (OBA) practices in buyer–supplier relationships in Malaysian manufacturing firms. Design/methodology/approach A questionnaire survey was administrated to CFOs or accounting managers of Malaysian suppliers. Exploratory factor analysis and Structural Equation Modeling procedures were applied to test convergent and discriminant validity of the measurement model and examine the relationships among the latent constructs in the structural model. Findings The results suggest that IOCM and OBA scales show acceptable reliability and validity. The findings also report that both product complexity and communication quality have a positive effect on IOCM and OBA in buyer–supplier relationships. However, the results suggest that IOCM does not influence OBA practice. Research limitations/implications Although IOCM and OBA constructs exhibited satisfactory reliability and validity, future research is required to refine and further validate these constructs. The data were only collected from the supplier’s perspective. Thus, future research is invited to benefit from matched data from both suppliers and buyers to generate additional insights on IOCM and OBA. Practical implications This study may assist suppliers and buyers in relationships by suggesting that complex products require the adoption of IOCM and OBA practices to reduce information asymmetries and manage costs. Furthermore, emphasizing quality of communication may enhance the implementation of these practices. Originality/value Theoretically, this study contributes to the academic stream of management accounting and cost management as it enhances an understanding of contributions introduced in prior literature on IOCM and OBA. It uses a complementary approach of transaction cost theory (TCT) and social exchange theory (SET) to explain the research model. Methodologically, the study validated scales for measuring IOCM and OBA in a new environment.

Comparing US public university and US private sector project costs

2019 ◽  
Vol 17 (2) ◽  
pp. 220-234
Author(s):  
Kelly Strong ◽  
Scott Glick ◽  
Gazala Syhail
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Public University ◽  
Small Sample ◽  
Cost Data ◽  
Future Research ◽  
Content Type ◽  
Starting Point ◽  
Project Costs ◽  
The Us

Purpose This study aims to focus on the factors influencing project cost at US public universities and compares them to similar projects in the US private sector. It also presents an analysis of the potential reasons for the difference or similarities in the two sectors. Design/methodology/approach This study utilized an exploratory, comparative case study methodology performed on a small sample of public university projects and two sources of private sector cost data. Findings The results infer that most of the US public projects have comparable costs to that of their US private sector counterparts. The cost data from the university projects were further examined to explore if there were any possible relationships between the types of delivery methods used, sustainability certifications achieved and two project performance indexes – cost and duration. Research limitations/implications A more thorough analysis with a larger dataset is required to make generalizable conclusions. However, the process used in this study does provide a good overview of how facility managers could organize their own cost comparison study to evaluate their project expenditures. Practical implications This research provides a starting point for future research into the topic of US public sector project costs when compared to US private sector counterparts and the impact of delivery system and sustainability on cost of US public sector projects. Originality/value Research on this topic is scant; as such, this paper provides a starting point for future research and offers insights into the potential impacts of project delivery method and choice of following a sustainability certification option.

Product recall strategy in the supply chain: utility and culture

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dara Schniederjans ◽  
Mehrnaz Khalajhedayati
Keyword(s):  
Supply Chain ◽  
Expected Utility ◽  
Large Scale ◽  
Economic Benefits ◽  
Product Recalls ◽  
Product Recall ◽  
Cross Sectional ◽  
Content Type ◽  
Supply Chain Networks ◽  
Cultural Variables

PurposeProduct recalls have the potential to damage firm and consumer quality reputation. While globalization has brought about various economic benefits, expanding supply chain networks have also made it more difficult for downstream organizations to manage product recall strategy. This study aims to examine the role of culture on a manufacturer's initiation of a recall and the severity of the remedy chosen for the product recall.Design/methodology/approachUtilizing the culture-specific argument, this study uses an exploratory approach to assess how cultural variables impact recall strategy utilizing a large-scale data analysis with a cross-sectional time-series panel of 898 firms.FindingsThe results provide support for the expected utility hypothesis that the more severe the consequence, the more likely a manufacturer will decide to recall the product. Moreover, the more likely the manufacturer will provide greater returns to the consumer. However, these relationships are impacted to differing degrees by the manufacturer's cultural origin.Originality/valueThese results provide evidence to researchers about how culture impacts the expected utility hypothesis in the decision theory. The study examines how deeply embedded cultural variables impact the relationship between the foreseeable consequence of the product recall and the recall facilitator and remedy.

An examination of the electronic market hypothesis in the US home mortgage industry

2013 ◽  
Vol 26 (1) ◽  
pp. 4-27 ◽  
Author(s):  
Sutirtha Chatterjee ◽  
Jeffrey W. Merhout ◽  
Suprateek Sarker ◽  
Allen S. Lee
Keyword(s):  
Early Years ◽  
Primary Data ◽  
Future Research ◽  
Electronic Market ◽  
Content Type ◽  
Mortgage Industry ◽  
The Us ◽  
Home Mortgage ◽  
Trade Press ◽  
Home Mortgage Industry

PurposeThe purpose of this paper is to longitudinally test the propositions of the Electronic Market Hypothesis (EMH) within the context of the US home mortgage industry.Design/methodology/approachThe paper uses a deductive, positivist case study, through a systematic examination of “texts” in the trade press over three time periods: 1995‐1999, 2000‐2002, and 2003‐2007.FindingsEMH propositions, while generally not found to be valid in the early years, were more consistent with evidence in the home mortgage industry in the later period.Research limitations/implicationsThrows fresh light on the debate between the appropriateness and the inappropriateness of the EMH as a core theory explaining the influence of Information Technology on market and industry structures.Practical implicationsDesigning of corporate strategies to foster efficient market mechanisms.Originality/valueUsing a relatively uncommon (analysis of primary data from trade press articles) qualitative research methodology which could serve as a guideline for future research. This approach offers opportunities to use various trade press sources to perform studies on the effects of IT on people, such as analyzing how IT departments are adapting their governance practices as workers increasingly use personal computing devices to access organizational assets (e.g., networks, applications, and data).

Industry specialization and audit fees: a meta-analytic approach

2015 ◽  
Vol 28 (3) ◽  
pp. 419-435 ◽  
Author(s):  
Cristina de Fuentes ◽  
Eva Sierra
Keyword(s):  
Meta Analysis ◽  
Audit Fees ◽  
Future Research ◽  
Published Data ◽  
Industry Specialization ◽  
Content Type ◽  
Analysis Techniques ◽  
Audit Market ◽  
Regulatory Bodies ◽  
Auditor Specialization

Purpose The purpose of this paper is to provide a comprehensive review of the literature that links auditor’s industry specialization (AIS) and audit fees (AFs) in order to clarify the puzzle of published results and provide overall conclusions that would help in future research. Design/methodology/approach To achieve this goal, the authors applied meta-analysis techniques in order to summarize, quantify and evaluate the published data related to the association between AIS and AF. Findings The meta-results are more robust when the proxy for AIS is the audit firm’s market share above 20 percent or the audit firm is jointly the national and city leader. For US-based studies, results are homogeneous in the post-SOX period. This is likely due to the higher demand for specialized auditors. The authors found positive and homogeneous results in the upper and lower market segment, which led to the conclusion that the bargaining power of the big auditees does not fully counteract the higher auditor specialization costs. Although the authors identified a publication selection bias, a specialization coefficient of around 2.0 percent was estimated. Originality/value The conclusions are relevant for those researchers that would benefit from a structured and systematic review of the published results. The outcomes help to understand the somehow contradictory empirical evidence and to provide solid foundations for future hypothesis developments. This contribution is also relevant for the regulatory bodies, always watchful of audit market behavior and the evolution of audit prices.

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